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EU To Microsoft: For the Last Time, Stop Bundling IE With Windows

This week Microsoft suffered a heavy blow when the European Commission (EC) issued an order demanding that it remove its browser from the Windows operating system package.

"Microsoft's tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice," the Commission stated.

Despite fresh competition from Google Chrome and Mozilla Firefox, Microsoft's Internet Explorer remains the dominant browser on the market.

A year ago, Norwegian firm Opera Software SA, a browser developing company, filed a complaint against Microsoft, claiming that bundling its browser into Windows hurt the competitive environment and violates antitrust regulations, writes The New York Times.

The practice is fairly common. Apple, for example, bundles its Safari browser in iPhone and iPod touch units — though it recently enabled other browser developers to avail their wares to users.

But unlike many of its rivals, including Apple and Firefox, Microsoft hasn't shared interoperability information for products — including its dominant Office software suite, the company told the EU (via MarketWatch). This means outside developers cannot create products that improve, build upon or commune more harmoniously Microsoft's existing software.

"Final determination" has not been made on the matter, but the EC essentially said the sanctions put upon Microsoft after a 2002 antitrust case in US courts will not fly in Europe. Those sanctions included requiring Microsoft to share its application programming interfaces with third-party companies and appointing a panel of three people that have full access to its systems, records and source code for five years in order to ensure compliance.

The US Department of Justice did not say whether Microsoft had to change any of its code or stop tying other software with Windows in the future.

The company was given eight weeks to reply to the EC's statement. Microsoft's argument to date has been that the merging of Windows and Internet Explorer was the result of innovation and competition, that the two were now the same product (i.e., inextricably linked together), and that consumers benefited from getting IE for free.

Microsoft may yet request a formal hearing, the BBC reports.

It's been a tough period for Microsoft. Yesterday an internal email revealed CEO Steve Ballmer's plans to cut 5000 jobs in the next year and a half. Microsoft has also been repeatedly slammed with antitrust court cases for at least a decade in both the US and Europe.

The first, in 1998, concerned licensing. Soon after, litigators attacked the company for not opening source code on its Windows Media Player. That case was settled in 2004 for 497 million euros (nearly $800 million).

In early 2005, the Commission threatened to fine Microsoft $2.4 million a day for failure to comply with the ruling and holding back technical information from its competitors. A year later, it made the company pay $357 million. In Feb. '08, an additional 899 million-Euro fine was ranked among the highest the EC ever imposed.

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